1kg gold bars stacked at the Perth Mint operated by Gold Co.
Matt Jelonek | Bloomberg | Getty Images
Gold hit a new all-time high on Monday, extending its torrid rally as investors flocked to haven amid the geopolitical and policy shocks of recent days.
Spot gold prices rose 2% to exceed $4,600 an ounce for the first time, before paring some gains, according to LSEG data. So far this year alone, prices have increased about 6%.
Morningstar equity analyst John Mills said the investigation into Federal Reserve Chairman Jerome Powell and speculation that it could hasten a change in Fed leadership has added new policy risks. “Especially if Chairman Powell resigns earlier than expected, then leaves the Fed, and is replaced by someone who supports rate cuts.”
Powell said Sunday night that federal prosecutors are investigating the $2.5 billion renovation of the Washington Fed’s headquarters and his testimony to Congress. The Fed chairman added that the investigation stems from President Donald Trump’s longstanding frustration with the Fed’s reluctance to cut rates as aggressively or quickly as he claims.
The scenario in which the appointment of a new Fed chair could pave the way for faster rate cuts has traditionally been supportive of gold. When interest rates fall, gold tends to rise because the opportunity cost of holding a non-yielding metal decreases. The impact was further amplified by recent US economic data showing a cooling labor market.
Recent flashpoints involving Iran and Venezuela have also further accelerated gold’s appeal as a safe haven.
Tensions with Iran have flared up again after the US government indicated it was considering options to respond to unrest in the country. The United States launched a military operation in Venezuela at the beginning of the year, and the country’s president, Nicolas Maduro, was detained over the weekend.
“All of this speaks to heightened geopolitical uncertainty, leading us to choose gold as one of the most high-conviction asset classes this year,” said Rajat Bhattacharya, senior investment strategist at Standard Chartered.
While the US actions in Venezuela appear to have reached a relatively quick resolution, the episode still highlights the persistence of geopolitical uncertainty and the risk of flare-ups across multiple regions, Bank of Singapore’s Eli Lee echoed.
In this environment, Lee expects gold prices to be further supported as geopolitical unpredictability continues. Beyond geopolitics, the structural case for gold remains intact, the bank added, as investors reassess their portfolio allocations following years of sanctions, geopolitical fragmentation and fiscal and financial complexities.
HSBC said trading momentum could push prices to $5,000 an ounce in the first half of 2026, although volatility may remain high and price pullbacks may become more frequent.
The London-based bank said the rally was due to a combination of demand for safe assets, a weaker dollar and policy uncertainty, and currency strategists expected the dollar to remain weak in 2026.
“Rising fiscal deficits in the US and other countries are driving demand for gold and could be a key factor going forward,” the bank said.
Central banks are also expected to remain strong buyers this year as they seek to diversify away from the dollar, but HSBC warned that higher prices could push purchases below the peak seen in 2022-2024.
Gold prices rose nearly 65% annually in 2025, hitting their highest level in decades.
